Capital Gains Tax (CGT) is a tax on gains—the profit realized on the sale of a non inventory asset that was purchased at a cost amount that was lower than the amount realized on the sale.
What Are The Procedures In Accounting For CGT?
Capital Gains Tax Regime has come into effect following the enactment of the Finance Act, Act No. 3 of 2013. A summary of Key changes to the taxation of capital gains are:
- 30% capital gains tax is imposed on chargeable person from the disposal of a chargeable asset , and capital gain is defined as the excess of the consideration received or receivable (whether in cash , kind or by any other means) over the cost base at the time of the realization.
- Where an asset is disposed of by a way of gift, the disposer shall be treated as having received consideration equal to the market value of the asset at the time of disposal and therefore will be subject to capital gains tax.
- A general filing obligation is imposed on persons who derive a capital gain (copy of the return is attached herewith).
- The Commissioner-General shall re-characterize a transaction or an element of a transaction in order to ascertain the actual cost base or consideration received in arriving at the chargeable gains.
- The Commissioner-General will make an assessment of the amount of any capital gain of that person and the tax payable within thirty (30) days.
Against this backdrop, we advise that you take note of these new changes and entreat you to have a copy of Finance Act, 2013. (LINK)
30% of the capital gain acquired from the disposal of a chargeable asset.
Due date for payments
Return should be submitted together with the payment within 30 days of disposa.l
Legal provision reference
Finance Act, 2013.